THE HOFFMANN MANUFACTURING COMPANY MORE DIFFICULT TRADING CONDITIONS THE annual
general meeting of The Hoffmann Manufacturing Company Limited was held on May 10 in London, Mr. J. W. Garton, J.P. (the Chairrnan) presiding.
The following is an extract from his circulated statement: During 1965 the Company experienced more diffi- cult trading conditions; increased competition, par- ticularly from abroad, affected selling prices; salaries and wages, National Insurance and penlion con- tributions rose. The decrease in demand for consumer goods led to spare capacity, but the demand for bearings for use in the capital goods industry was generally maintained. Whilst the turnover increased compared with the previous year, it included more export sales at very low profit margins.
The order position at this time is fairly satisfactory and includes an increased element for aero engine bearings, in which the Company has long specialised, being the foremost manufacturer in the country; these are fcit delivery over a year or So.
The extensive capital re-equipment programme will be completed this year and has taken longer than :was anticipated due to delivery difficulties.
The level of capital expenditure in recent years has been exceptionally high and the depreciation allowance should be sufficient for some years to meet our requirements in new plant.
The change in the pattern of demand has resulted in stocks increasing and for the first time we have excess capacity which should help us to carry more stock sizes, avoid extensive overtime and have a more balanced economy.
The trading profit of the Group for 1965 before taxation but after all other charges amounts to £922.650 and compares with £1,331,484 for the pre- vious year. Corporation and Overseas Tax absorbs £257,160 against tax of £456,458 in 1964, but the Income Tax to be deducted from the Final Dividend will also be payable to the Revenue in due course. The Directors have reduced the taxation charged in this year's Accounts by the sum of £70,000 being an over-provision of tax in previous years. The net profit of the Group is therefore £735,490 and com- pares with £875,026 for 1964.
The Directors recommend a Final Dividend of 173 per cent. which with the Interim Dividend already paid of 73 per cent. less tax makes a total Dividend of 25 per cent. for the year, which is the same rate as in 1964. The balance carried forward will amount to £464,661 for the Parent Company and £845,844 in the case of the Group.
Bearing in mind the country's economic difficulties and the possibility that the present wage and price inflation may necessitate still further restrictions, it is hazardous to make a forecast about the future. However. I am hopeful that the trading conditions of the Company may show an improvement this year over the past year.
The report and accounts were adopted.
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